Published: Wednesday, May 14, 2008

The Atlantic City area is in a sweet spot of the nation’s real estate market, according to first-quarter price and sales figures released Tuesday by the National Association of Realtors.Median home prices increased 4.8 percent in the Atlantic County market from the first quarter of last year, better than the 3.2 percent price rise for the Northeast region. Meanwhile, home prices dropped 7.7 percent nationwide for the period.

And New Jersey was one of just three states (besides Indiana and Alaska) where home sales increased from the year-ago period, rising 4 percent to 169,600 units sold in the first quarter. Nationwide, sales fell 22.2 percent and in the Northeast as a whole dropped 23.9 percent.

Lester Argus, president of the Atlantic City & County Board of Realtors, said the figures match what he’s seeing in the area.

“All of the Realtors I’ve talked to are doing a lot more business than they were six months ago,” Argus said. “My office (Argus Real Estate in Ventnor) itself is very busy. … With interest rates as low as they are and prices the way they are, I think it’s going to pick up even more.”

For Ian Lazarus, president of the Cape May County Association of Realtors, the first-quarter figures suggested the declining home resale market has pretty much bottomed out.”That’s telling me the worst is probably behind us,” Lazarus said. “I don’t know if the market is done dropping, but I do know that we’re closer to the bottom than the top.”

He said price reductions lately have been yielding quick sales, and more buyers are waiting for a signal that prices have stopped falling.

“I’m now working with 15 to 20 buyers, and as soon as they feel the market has built in some kind of floor, they’re going to buy,” Lazarus said.

To the state Realtors association, the performances of New Jersey and the Atlantic City area prove its longtime contention that the depth of the housing slump depends on the region.

“It’s worth saying again, all real estate is local,” said Drew Fishman, state association president and broker with ReMax Atlantic in Northfield. “National trends don’t necessarily translate to every market.”

Lazarus of Sea Isle City said the inventory of homes available in that city has shrunk from 375 units a year ago to about 290 now, reducing choices. “People are saying, I want one like my friend got last year,” he said. “Well, that’s not there now.”

Home prices dropped in two-thirds of the 149 metropolitan areas surveyed by the National Association of Realtors. The national median price - one at which half of homes sold for more and half for less - dropped to $196,300 from $212,600 the year before.

The Atlantic City metro area - all of Atlantic County - saw its median home price rise from $264,600 to $277,400 during the same period.

Home prices nationwide might be stronger than the survey suggests, according to NAR economist Lawrence Yun, because difficulties lining up jumbo mortgages may have held down sales of houses in the high end of the market.

Two other housing price surveys - from the Office of Federal Housing Enterprise Oversight and Standard & Poor’s Case-Shiller Home Price Index - track price changes at particular properties to make comparisons between quarters more accurate. Those surveys, which come out later this month, have indicated a weaker housing market.

The Federal Reserve Bank of Philadelphia reported Tuesday that 36 professional forecasters it surveyed believe those home price indexes won’t stop declining until the second quarter of 2009, and won’t turn positive for the year until 2010.

As of Saturday morning March 15th, there have been 37 closed residential sales this year (1/1/2008 - 3/14/2008) in Sea Isle City.  There are currently 48 residential properties Under Contract. There have been 17 residential properties that have gone Under Contract this month (3/1/2008 - 3/14/2008) - more than 1 per day!

How’s the market? You tell me ………

Andrew Fasy

Broker/Owner

NJ Realty, Inc

By Lavinia Smerconish

In any market, people are interested in the value of their home. But I’ve been in real estate for 24 years, and today, the intensity of interest in the market is unprecedented. It’s gotten so I can’t go anywhere on the Main Line without being buttonholed by some panicked acquaintance worried about the so-called “real estate crisis.” I’ve fielded inquiries over dinner at the Guard House in Gladwyne, in the Cosi coffee line in Bryn Mawr, in the frozen foods section at the Genuardi’s in Radnor, and at the movies in Edgmont.

I tell the curious what I know: Yes, the Main Line market has indeed softened, but it’s a far cry from any crisis. The softening has nothing directly to do with the sub-prime market, or the availability of quality real estate or mortgage money. The market forces in effect here are Matt Lauer, Diane Sawyer, Ann Curry and their ilk. Of course, not everyone in the media has nefarious motives. (I should know; I’m married to a member of their ranks.) But the media-driven perception of what’s going on in the marketplace has me concerned.

Let me explain. The din of the network morning shows fill all of our kitchens as we hurry the kids off to school or otherwise begin our day. Inevitably, we see a plethora of so-called market experts on TV telling us the industry is in decline and the worst is yet to come. No doubt this drives ratings. But on the Main Line, there’s no sub-prime failure to speak of, and we haven’t created a real estate bubble so large as to precipitate a burst. So why are we soft? Because we believe what we see on TV. I can’t imagine anyone changing the channel while being told that the greatest investment he or she will make in a lifetime is in jeopardy. There are never any exceptions offered. It’s a blanket prognostication for the country, overlooking the deviations, such as the Philadelphia suburbs.

The minute they say it, we’re on our way to a self-fulfilling prophecy. First, there are the buyers. They hear about the decline in the market and believe it must be the case everywhere. They certainly don’t want to appear foolish or unsophisticated by purchasing a home at anything close to an asking price, no matter how reasonable that asking price may be. So they either make ridiculously lowball offers, or stay home and wait for a complete bottoming-out — or until those same national experts tell them the water is warm enough to jump in again. Sellers, meanwhile, are frustrated about the absence of buyers. They try the usual array of staging, sprucing-up, painting and polishing. And when that fails, they bury St. Joseph in the yard. Finally, they significantly drop their asking price to get the attention of the few buyers who have to move due to life circumstances — ­relocations and new babies and the like.

Prices continue to drop, but because there’s been no public pronouncement that the market has recovered, homes languish on the market while buyers wait for the proverbial bottom to fall out, even though there are great values to be had. We have good inventory on the Main Line; interest rates are at some of the lowest points they’ve been in years; there’s still no shortage of mortgage money, and even jumbo mortgages are available at no penalty to qualified buyers. Sellers remain welcoming, but buyers are stuck in a holding pattern, waiting, waiting, waiting.

They’re waiting for clearance. Not from someone like me, who knows their streets and deals with the market forces in their community every single day. No, they won’t get in the game until somebody deemed a market expert, sitting in a TV studio far away, looks into a camera and tells them the crisis that never existed in their community has ended.

And where in the world is Matt Lauer then? On to the next big story.

The preceding article was printed in Philadelphia Magazine’s March issue. I could have easily replaced any mention of the Main Line with Sea Isle City - the same holds true. While our real estate market softened in 2005 - 2006 like elsewhere in the country, it stabilized and has begun to become active again. The number of homes Sold in 2007 increased by 68% over 2006 units Sold, and the first quarter of 2008 numbers are double those of 2007 so far.  Prices are certainly down from the 2004 highs, mortgage rates are very attractive, there is ample inventory, rentals are booming, and there is constrained demand. Like the author (and most would-be buyers) I’m just waiting for someone to say it’s OK to buy again!

Andrew Fasy

Broker/Owner

NJ Realty, Inc

That’s right. If you’ve had your eye on the perfect Sea Isle get-away, but put off purchasing because you think mortgages are difficult to obtain, go ahead and take the plunge. Despite all the press accounts of an industry in crisis, if you’re a qualified borrower and choose the right lender, there’s plenty of mortgage money available.

What does the investor market have to do with getting a mortgage?

Typically, mortgage lenders sell their loans in the secondary market to generate money to fund new loans. If a loan becomes delinquent, the investor may ask the Lender to buy back the loan. However, if the lender lacks the capital to do so, the problems start. With delinquencies in some areas of the country rising, many investors have backed off purchasing loans, leaving mainly government agencies like Fannie Mae and Freddie Mac willing to purchase mortgages, and then, only if they are within the ‘conforming’ limit of $417,000.

What if you need a mortgage greater than $417,000?

That’s called a ‘non-conforming’ or ‘jumbo’ loan, and they are still readily available. There are mortgage companies and banks that don’t rely on investors to purchase their loans. Therefore, a customer with good credit, the necessary down-payment, income and reserves, will easily qualify for a jumbo loan.

My best advice is to choose a Lender carefully by researching their financial stability. Once you decide on a lender, make sure you fully understand the terms of the loan product you choose. Make sure it fits your needs and comfort zone.

What constitutes the right lender?

Liquidity and the ability to generate it. Most of the mortgage lenders that have failed or are currently in crisis made questionable loans in the past; and as a result, do not have the liquidity to continue lending. With solid lending practices and financial backing many mortgage companies experienced no disruption in lending because they were not dependent on investors in the secondary market to purchase its loans.

Don’t let the headlines scare you. Reliable financing is available to purchase your dream home. Rates are very good and homes are priced to sell. Happy house hunting!

Andrew Fasy

Broker/Owner

NJ Realty, Inc

As a Realtor, the question I am asked most these days is: “Has the market hit bottom yet?” My answer today is: “Yes. I think so. I think we hit bottom in early November.” This is my opinion, of course. However, I base my opinion on statistics and what I see, not what I “feel”. What I see is an awful lot more prospective buyers looking, and alot more properties being sold. Those buyers began to come back to the Shore market in mid-November. The activity noticeably increased. Statistically, the first quarter of 2007 has seen more sales occurring (more than double that of 2006, in fact) than we’ve seen since the Spring of 2005.
I’m not exactly sure why the market stopped so abruptly. There are a number of theories. I seem to think there was more than one contributing factor; interest rates began to tick higher, Hurricane Katrina was scary, thefast pace of the market was intimidating for some. There were other possible contributing factors. When I receive my Masters in economics, I may have a more definitive answer. What I know is that the real estate sale market came to a halt at the beginning of the Summer of 2005.
Is the “correction” over? First, it needs to be said that there was a correction. As I look at sale statistics for the past
2 years, I see a 15% decline in average sale prices in Sea Isle City. Some areas of the market have experienced a larger
decline. Land values, for instance, have dropped closer to 20%. I believe that the reason for this is that those prices were driven by developers, speculating on future sale prices. The developers, by and large, are not purchasing anything at all right now.
So, yes, there was a correction. Is it over? Only time will tell of course, but as we head into the Spring there are fewer
homes on the market than the past year and more sales occurring than last year. So, I would have to say yes.
Is now the time to buy? Yes. That’s an easy answer. Why? Well, although the inventory is thinning, there are still a good amount of homes on the market. There is a good selection in all price ranges and locations. Also, although I don’t see “desperate” sellers like last year, there are “motivated” sellers. There are also mostly realistic sellers. It has taken some time, but most sellers have been forced to acknowledge market conditions and reduce their prices.
Further, we are seeing another strong year in the rental market. That income may help you transition into a second home with confidence.
Historically, prices in Sea Isle have increased by an average of 15% per year over the past 25 years. I’m not sure what the near future will bring in terms of appreciation, but unless you plan to “flip” the property, the long term outlook is bright.
Is it time for you to buy a vacation home at the Shore? That’s a question only you can answer. As a Realtor, I can tell you that I have more confidence in the market today than I’ve had in some time, and that the real estate market here at the Shore is stable. There are good deals and good values to be found. And of course there’s the beach!

Andrew Fasy
Broker/Salesperson
NJ Realty, Inc
4914 Landis Ave
Sea Isle City, NJ 08243
www.njrealtyinc.com
800-648-9316 * 609-263-2267
Fax 609-263-3707